Workspace still flying

The underlying value of the property portfolio jumped 27 per cent to £1.08bn, and included a £73m uplift from residential-led development schemes. This helped drive down the loan-to-value ratio from 40 per cent to a modest 31 per cent. Like-for-like estimated rental values grew by 12 per cent to £16.13, while occupancy rates edged up slightly to 90 per cent. Enquiry levels are currently running at around 1,000 per month, of which an average of 85 are converted into lettings - although this rose to 103 in the final quarter of the year.

Transport and communication improvements have helped to open up new areas in London for small businesses. To cater to their needs, Workspace has completed seven refurbishments over the past 18 months, providing 120,000 sq ft of upgraded space and 90,000 sq ft of new space. This has delivered a £2.6m uplift in the rent roll of the affected buildings to £5.9m. This should reach £7.2m if the projects reach 90 per cent occupancy.

Further evidence of the demand for office space came with the recently refurbished 50,000 sq ft Pill Box project in East London. Completed in February, the space was a third let by April at an average rent of £26 per sq ft - considerably ahead of the company's initial expectation of £22.

Acquisitions included 42,000 sq ft of net lettable space in Gray's Inn Road for £18.1m, with the average rent of £26 per sq ft giving an initial rental yield of 4.3 per cent. Further developments will be financed through the company's improving cash flows and undrawn facilities of £72m.

Analysts at Investec Securities have upgraded their forecast book value for March 2015 and 2016 by 18 per cent, to 577p and 643p, respectively.